Indian Overseas Bank FD Premature Withdrawal

Indian Overseas Bank FD Foreclosure Charges

Indian Overseas Bank FD pre-closure charges are based on the deposit amount. Here are the applicable pre-closure charges:

Premature withdrawal rules and penalty rates updated as per prevailing Indian Overseas Bank guidelines as of October 2026.

How Interest is Recalculated on Premature FD Closure

In case of premature closure, IOB calculates interest on the interest rate applicable to the time for which the deposit really remained with the bank, applicable on the date of deposit. The applicable foreclosure charge is deducted from the applicable rate to get the qualifying IOB FD interest rate.

Eligible Interest Rate = Lower Applicable Rate for Actual Period Run − Foreclosure Charge

Step-by-Step Calculation Example

The example below explains how the applicable interest rate is recalculated after a premature closure.

Assuming an Indian Overseas Bank domestic deposit of ₹2,00,000, within the 0.50% range, booked under the 1 Year tenure at 6.50% p.a. and foreclosed after completing 270 days.

The IOB FD rate for the "270 Days to less than 1 Year" tenure, as applicable on the booking date, is 5.50% p.a. Reduced by the 0.50% foreclosure charge, the eligible rate comes to 5.00% p.a.

How to Close an Indian Overseas Bank FD Prematurely

Indian Overseas Bank offers two channels for premature closure: online and offline.

Online Channel (Internet Banking / IOB Mobile Banking)

The online process allows eligible customers to initiate FD premature withdrawal through digital banking channels.

• Log in: Access Indian Overseas Bank Internet Banking or the IOB mobile banking app.

• Navigate to deposits: Go to the Term Deposit or FD section of the dashboard.

• Select the FD: Choose the specific deposit account you want to close before maturity.

• Choose foreclosure: Select the premature closure option and confirm the deposit to be closed.

• Review recalculated interest: Check the revised payout figure before confirming the transaction.

• Confirm the request: Authenticate the request, and the proceeds are credited to your linked account.

Offline Channel (Branch Visit)

If you are a customer and you withdraw your FD before maturity. You can also go to the branch of Indian Overseas Bank and submit the documentation and closure request.

• Visit the branch: Carry all the details of your account to the nearest branch of Indian Overseas Bank.

• Carry ID proof: You can also take your Aadhaar card or PAN card as ID proof with you.

• Submit a written request: After that, send your written request to your bank for premature closure.

• Provide joint consent: For joint accounts, the written request must be made by all depositors.

• Submit the FD receipt: Hand over the original deposit receipt issued at the time of booking.

• Receive credited proceeds: The eligible amount, after any foreclosure charge, is credited to your account.

Exceptions and Special Conditions

Indian Overseas Bank builds two distinct mechanisms into its foreclosure structure, beyond the standard amount-based tiers.

• The Up-to-₹5-Lakh Foreclosure Waiver: For deposits up to ₹5 lakh that have completed the applicable minimum holding period, no foreclosure charge applies.

• Bulk Deposit Penalty Waiver Trade-Off: For bulk deposits of ₹3 crore and above, if IOB approves a premature withdrawal penalty waiver, the deposit earns an interest rate 10 basis points lower than the standard rate for that tenure.

• Non-Callable Restrictions: Non-callable deposit premature-withdrawal provisions should be stated only according to the specific IOB product terms applicable to the deposit.

• Tax Saver FD: IOB Tax Saver FD is available with a lock-in duration of 5 years and does not permit premature closure before completion of 5 years from the date of deposit. The deposit is repayable on or after the maturity date in the normal course.

Callable vs Non-Callable Deposits at Indian Overseas Bank

Callable deposits follow the standard foreclosure charge and recalculation approach. Non-callable deposits are structured differently: closure before maturity is generally not permitted, except in specified exceptional circumstances. IOB Non-Callable Retail Term Deposit is offered for deposits of ₹1,00,01,000 and above but below ₹3 crore with tenures ranging from 91 days to below 2 years, subject to the eligibility restrictions of the scheme.